Hard Truths About Energy

In a report titled Hard Truths: Facing the Hard Truths about Energy, the National Petroleum Council (NPC), an advisory board to the U.S. Secretary of Energy, reports on the future of the energy, and specifically the oil and gas industry, to the year 2030. The major findings were called "hard truths" and are listed below.

Hard Truths about Demand: Energy demands are expected to increase 50-60% by 2030. Energy demand is driven by rise in population and income; since population is exploding and global GDP is expected to double by 2030, energy demand is rising. Oil and gas are indispensable energy sources if this demand is to be met.

Hard Truths about Supply: We are not running out of fossil fuel, but the risk associated with fossil fuel use is increasing. It will be more difficult and more expensive to expand the infrastructure that is needed to process and transport the larger quantities of fuels that will be necessary to meet rising demands. All sources of energy, including nuclear, biomass, solar, wind, geothermal, and unconventional liquids, will be needed to meet the increasing demand.

Hard Truths about Energy Security: Energy security should not be confused with energy independence; energy independence is not realistic in the foreseeable future because we are part of an interdependent global economy. Instead we must moderate our energy demand, expand and diversify domestic energy sources, and strengthen global energy trade and investment. "There can be no U.S. energy security without global energy security."

Hard Truths about the Energy Workforce: A majority of the U.S. energy workforce, including skilled scientists and engineers, is eligible to retire within the next decade. A new workforce must be replenished and trained. But the industry faces a shortage of science and engineering graduates, coupled with poor image and competition from other industries.

Hard Truths about Carbon Emissions: Policies aimed at reducing carbon emissions will alter the energy mix, increase energy-related costs, and require reductions in demand growth. To address these issues, the NPC recommends we moderate demand by improving efficiency, developing low-carbon energy sources, and investing in carbon sequestration.

What do I think about the Hard Truths?

This study points out that many driving factors are contributing to the "hard truth" that energy costs are projected to increase (closer to the "real" cost and value of energy) in the near future. Clearly we need to prepare for these increased costs so they don't devastate our economy. This report emphasizes the role of oil and gas in meeting future demands, so it focuses on improving energy efficiency and developing other fossil-based technologies. Simultaneously, it deemphasizes the issue of carbon emissions and ignores the "hard truth" that we need to drastically reduce our use of fossil fuels if we want to prevent serious climate change that could lead to much bigger problems than energy shortages. But the NPC isn't worried about climate change (even if they admit it is happening, they don't think it is a problem) so they didn't consider that we need to actually REDUCE our current consumption of fossil fuels.

Adding that variable to mix, I would change the recommendations to include:

- Invest in industry- and business-wide energy conservation efforts

- Redirect government subsidies and funding from the petroleum industry to non-fossil based energy providers/developers

- Invest in energy conservation and climate change education

- Develop a plan and a timeline that quantifies what is needed to transition the country (and the world) to lower energy demand and increased non-fossil energy supply.

What do you think about the Hard Truths?

Disclaimer:
While one might be skeptical of a study that involved petroleum companies, this particular study integrated data and results from 100 different reports/studies and included 350 participants, including individuals from other fields, not associated with the petroleum industry. So while you might raise your eyebrow or flat-out disagree with some of the conclusions that are drawn, the data that is presented is still very useful.

Click here for an easy-to-follow ppt presentation of the report:
http://downloadcenter.connectlive.com/events/npc071807/pdf-downloads/Report_Slide_Presentation/NPC_Pres_71807_Notes.pdf